Q 1.

) Consider the following problem of assembly line balancing:

Task P1 P2 P3 P4 P5 P6 P7 P8
Immediate predecessor - P1 P1 P2 P4 P3, P5 P6 P7
Task time (min) 0.9 0.4 0.6 0.2 0.5 0.4 0.7 1.1
Total task time (min) 4.8

Assuming that 55 minutes per hour are productive, compute the cycle time needed to obtain 50
units per hour as the output.

 Determine the minimum number of workstations required and assign tasks based on longest
task time rule.
 Compute line utilization

Q 2.) We need 6500 gauges per year. The ordering costs for these is $120 per order and the carrying
cost is 25% of the cost per unit. The price offers are as follows :

Quantity Range Price / Unit

1-150 85
151-400 72
401 & above 69

Determine the order quantity.

Q 3.) Mini Case

Exciting Games , Inc., produces a game for the digital platforms on a disk which is entitled: Ice and
Fire, the Final Battle. The company sells the disk to software retailers for $30.00, each, with a 7%
discount for orders of 125 copies or more. Every retailer takes the discount. The variable costs of
producing the disks are low, only $8.00 each for the blank disk onto which the game is copied, the
wages of the machine operators, and the packaging.
The game has become a best seller, and the production manager must plan to expand the capacity
of the plant to turn out disks. The disks are produced on a machine which makes copies of a master
disk, one at a time. Each copy takes fifteen minutes, which includes inserting the blank disk,
imprinting the game, and removing the finished disk.
At present, the Company has four machines; each machine cost $90,000 and has a service life of five
years. The Company operates two eight-hour shifts per day, 50 weeks per year, and the machines
require servicing and adjustments for one hour every day.
New machines can be purchased for $95,000. They also have a service life of five years and require
one hour of servicing, but they can make copies in twelve minutes. Because of the savings in copying
time, the variable cost will drop to $7.25 per disk.

a. What is the annual effective capacity of current machine?

b. What is the annual depreciation of current machine? (Use straight line depreciation expense
= cost/service life.)
c. What is the present breakeven point?
d. What is the annual effective capacity of the new machine?
e. What will be the annual effective capacity of the plant if one new machine is purchased?
f. What will be the new average variable cost per unit?
g. What will be the new breakeven point?
h. Suppose a second new machine is purchased. What will be the yearly capacity of the plant?
 i. What will be the new avg variable cost per unit?
j. What will be the new breakeven point?

Q 4.)

Star Ltd is a producer of an item, which is used as component is manufacturing engine. The demand
forecast for this item for the next 5 periods is 6000, 13,000, 12,000, 8,500 and 4,500 units. The
production cost per unit made on regular time is Rs. 51 and Rs. 55 for each unit produced on
overtime. This item can also be subcontracted at a cost of Rs. 58 per unit. Inventory holding costs are
Rs. 8 per unit per period and no backorders are allowed. In each period, 9000 units can be produced
on regular time, 2000 units can be produced on overtime and up to 2560 units can be
subcontracted. Solve the above aggregate production-planning problem.

CASE STUDY

Pressomat is a laundry service company that set up shop a few months back. They are positioned in
a market with high demand but are facing trouble in managing efficient service delivery. The staffs at
laundry are very efficient and consist of 2 delivery agents and 2 service personnel. The process
begins when a customer books a slot for pick-up of dirty clothes. It takes a customer around 2 min to
book a slot. The laundry service promises to pick up the dirty clothes within 15 hours of booking. The
staff takes at max 15 mins to pick up clothes. This is followed by suitable entry which takes 5 mins
for every booking. The clothes are then put in the washing machine. Each lot of clothes is washed for
20 mins with fast action detergents. The washing machine has a capacity of 15 big and 5 small
clothes at a time. This is followed by 2 mechanical stages:

A) 15 minutes rinsing process for 20 clothes

B) Stain removal process of 5 clothes per min

Pressomat puts a cloth through stain removal process only if a customer explicitly requests. Right
now only 5% of the customers, request their clothes be put through stain removal. Once the washing
and rinsing is done clothes are put through the dryer for 10 mins. The service has only one dryer that
can handle 20 large clothes in a lot. Three small clothes weigh as much in the dryer as one large
cloth. The service thanks fully has two washing machines. Even after a drying, each cloth need to be
spread out and left for 10 mins on a sunny day and 23 mins on a humid day. Then comes the process
of ironing the clothes which takes 6 mins for a large cloth and 5 mins for a smaller one. Once this is
done, all the clothes of each customer is folded and packed. The delivery process is same us that of
pick up. 10% of the customers, request for neither pick up nor delivery while 70% request only for
pick up. For the immense amount of work they put in 25 days a month the personnel receive 20000
for services like washing, ironing and 10000 for delivery.

You can help PressoMat by finding out:

A) Maximum Capacity of clothes they can process in a day if they work 10 hours every day
B) Delivery time they should promise to customers so that they always deliver on time
C) Minimum cost they should charge the customer per cloth